In 2001 Cinnabon had no licensing program and no products for sale outside of their mall, airport and kiosk locations across the U.S. and International Markets.  Today Cinnabon Licensing has grown to over 70 products with multiple world-class licensing partners like General Mills and Kellogg’s.   The program has developed into a best-in-class model for restaurant brands that wish to expand their brand footprint, creating broader brand awareness and incremental revenue flows for the organization.  This success and the long-term viability of the Cinnabon program came as the result of careful planning, research and development.

Choosing the right Cinnabon products was a critical first step for the brand.  The Cinnabon Licensing team took several factors into consideration when defining their retail product/licensing program:

• Product Lines – Should the retail product line include products sold in the restaurants or products developed exclusively for the retail channel? Are there signature ingredients that can be leveraged in complementary product categories?
• Consumer Interest and Acceptance – Cinnabon understood that research findings related to consumer interest and affinity would not only help with product identification, but would prove useful during negotiations with prospective licensees and aid in the retail sales process.  Moreover, research gave the brand “permission” to enter certain categories and thus was perceived as a good fit. Finally, consumer taste tests would be integral to ensuring the products met consumer expectations.  Combined with intent to purchase measurements, Cinnabon was able to validate the proposed ROI and provide essential data for forecasting production.
• Royalty Rates – Which product categories carry more substantial royalty rates? Cinnabon took into consideration when developing their retail branded product program that product categories with higher royalty rates would offset program development costs and generate ROI more quickly.  They also realized these categories might be more difficult to license until the brand was able to demonstrate a track record of success.
• Cannibalization of Restaurant Sales – Cinnabon understood that this was a legitimate concern of both its senior managers and franchisees alike. This concern was taken into consideration when identifying the products/categories, which would be sold at retail. Cinnabon addressed this concern by developing products that were brand extensions or which incorporated signature ingredients.  In many cases the most successful retail product programs involve signature products sold at the restaurants.

Cinnabon saw that ingredient licensing would be an effective approach to reinforcing the uniqueness and premium quality of their signature ingredient, Makara cinnamon.  It addition, ingredient licensing allowed Cinnabon to leverage its brand into numerous products that their restaurants were not necessarily known for – but were considered a good fit with the ingredient.  By extending the program into ingredient licensing, Cinnabon was able to incorporate the brand into cereals, snack bars, beverages, coffee drinks and more through their licensing program.

In Part 2, Bill will take you through how Cinnabon used research and market testing to mitigate risk and enhance the success of their brand licensing program.

As you can see brand licensing is a strategy that even big brands are not aware of, and yet, it is tremendously powerful. It is a tremendous tool of leverage, empowering all parties involved to get more results with less effort.

A great way to bring the power of brand licensing to your company is to pick up Brand Money Secrets.  This informational product offering provides an overview of what brand licensing brings to your business, an audio program, and, a self assessment to determine how this strategy fits into your business.

When you listen to the audio, you’ll hear Bill talk about his success at Cinnabon and Pete relay stories of successful licensing deals with Coca-Cola and Rubbermaid.

Find Brand Money Secrets at www.BrandLicensingExpert.com/BrandMoneySecrets.